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In 1845, Northwest Territories, British North America, young James Howlett (Troye Sivan) sees his father John Howlett (Peter O'Brien) killed by Victor Creed's father, Thomas Logan (Aaron Jeffery). In an act of vengeance, James kills the elder Logan using his bone claws which protrude from his hands. With his dying breath, Logan tells James that he is also his son. James and Victor (Michael-James Olsen) then run away. In the following years, adult brothers James (Hugh Jackman) and Victor (Liev Schreiber) are seen fighting together throughout the American Civil War, World War I, World War II, and eventually the Vietnam War, their regenerative powers keep them from being killed in the battlefield. James is forced to act as a check on Victor's ever-increasing rage and ferocity. In Vietnam, Victor kills a superior officer after being stopped from raping a girl, and James and Victor are sentenced to death by firing squad, though their unique regenerative abilities keep them alive.

William Stryker (Danny Huston) approaches the two mutants and offers them membership in Team X, his elite group of mutants. The team consists of mutants Fred Dukes (Kevin Durand), who's super-strong and invulnerable, John Wraith (will.i.am), who can teleport, Chris Bradley (Dominic Monaghan), who can control electricity with his mind, expert marksman Agent Zero (Daniel Henney) and mercenary Wade Wilson (Ryan Reynolds). The brothers join the group, and are sent to the team's first mission: Invade a diamond traffic operation headquarters to retrieve a meteorite used by the leader of the dealers as a paperweight in Lagos, Nigeria. After retrieving the meteorite, Stryker and the team interogate nearby village people to see if there are any other meteorites. James is disgusted by the murders committed by his teammates and abandons the group.

Six years afterward, James - now going by his last name, Logan - is a lumberjack living with his girlfriend Kayla Silverfox (Lynn Collins). Meanwhile, Victor hunts down and murders Bradley, mentioning that Wade is already dead. Stryker locates Logan, and claims that someone is out to kill members of the now-disbanded team. Stryker asks Logan for help, but is refused. Shortly after, Silverfox is murdered by Victor. Wolverine hunts down his half-brother, but is easily defeated. Stryker once again asks Logan for help, and he agrees. Stryker then has Logan's skeletal system reinforced with adamantium, a virtually indestructible metal retrieved from the meteorite found by Team X. Before the procedure, Logan asks for his new dog tags to say "Wolverine", based on a story that Kayla had told him. After the procedure, Stryker orders Wolverine's memory to be erased, but Wolverine overhears this and flees. Stryker orders Agent Zero to capture him.

An elderly couple Travis (Max Cullen) and Heather Hudson (Julia Blake) sees Wolverine in their barn and provide him a home until the next morning, only to be shot dead by Zero. Wolverine takes out several HMMWV, a helicopter and Zero himself, then goes to Las Vegas. Wolverine locates former associates John Wraith and Fred Dukes (who is now massively obese from a guilt-driven eating disorder), seeking to learn the location of Stryker's new laboratory. Wolverine learns the disbanded team had been capturing mutants for Stryker, and one of them, Remy LeBeau (Taylor Kitsch), also known as Gambit, had escaped the island and knew the location. Dukes also tells him that Victor is actually working for Stryker, capturing and killing mutants for him. Meanwhile, Stryker captures Scott Summers with Victor's aid.

Wolverine and Wraith locate Gambit in a New Orleans bar. Wolverine talks to Gambit while Wraith keeps watching outside, but Gambit suspects Wolverine was sent to recapture him and, using his ability to charge objects with kinetic energy, throws several playing cards at Wolverine that sends him flying through a wall. Outside, he sees Victor has killed Wraith and taken a sample of his blood. Wolverine fights Victor, only to be interrupted by Gambit. Victor escapes, and after a brief struggle, Gambit agrees to take Wolverine to the mutant prison on Three Mile Island. Once there, Wolverine confronts Stryker and learns Silverfox is still alive, having faked her death with hydrochlorothiazide. She was keeping track of the mutant to free her sister, Emma Frost (Tahyna Tozzi), who is also in the prison. With no more quarrel with Stryker, Wolverine departs. Victor, angered at Stryker that he let Wolverine go, demands the adamantium procedure. Stryker, however, tells him that he won't survive the procedure and in an act of rage, Victor tries to kill Silverfox. Wolverine hears Silverfox's screams and attacks Victor. Finally having the chance to kill Victor, Wolverine chooses not to give in to his animal instincts and instead knocks him out. Silverfox shows Wolverine to the holding cells, and he frees the mutants there; among them are Emma Frost and Scott Summers.

Panicking, Stryker prematurely activates his newest creation, Weapon XI (Scott Adkins) (also known as Deadpool), a bald, pale skinned and deformed Wade Wilson, lacking a mouth and with patterns marking adamantium bone structure. The rescue party approached an exit when it is blocked by Weapon XI who is under Stryker's control. Wolverine tells them to find a new exit as two blades extend from Weapon XI's arms, similar to Wolverine's claws, but more like Wilson's preferred katanas. At this moment Wolverine realizes that this monstrosity is actually Wade Wilson. Weapon XI has the abilities of several of the killed and captured mutants such as Scott's optic blasts, Wraith's teleportation, and Wolverine's healing ability. During the escape, Silverfox is mortally wounded. The other mutants escape through the facility's tunnels, guided by Scott who is unable to tell them how he knows the exit. Emerging from the tunnel, the party encounter a helicopter; emerging from the helicopter is a familiar figure, Professor Charles Xavier (Patrick Stewart), who has guided them to safety and offers them a shelter at his school.

Meanwhile, the fight between Wolverine and Weapon XI spills onto the top of one of the plant's cooling towers. Weapon XI overpowers and prepares to decapitate Wolverine, but Victor returns to aid his brother. Wolverine and Victor, now working together, are able to decapitate Weapon XI; sending its head, still firing optic blasts, down into the cooling tower. Wolverine coldly informs Victor that despite his help, their relationship is over. Victor simply reminds him that as brothers, they can never be finished, and jumps off the side of the cooling tower. The resulting damage from the optic blasts causes the cooling tower to collapse, but Wolverine is saved by Gambit. Wolverine asks Gambit to ensure the prisoners are safe, while he returns to find Silverfox, who had stayed behind. As he carries her to safety, Stryker shoots him in the back with an adamantium bullet. Wolverine tries to kill him but is soon shot in the head, knocking him unconscious.

Silverfox uses her powers of persuasion to order Stryker to walk away until his feet bleed, then dies from her injuries. Gambit returns to assure Wolverine that the mutants are safe, but due to amnesia caused by the brain damage the adamantium bullets inflicted, Wolverine does not remember anything (this was Stryker's intention, knowing that even the adamantium bullets could not kill Logan). Gambit tries to get Wolverine to come with him, but he declines. Gambit wishes Wolverine good luck before departing, and Wolverine flees the scene as the ambulances and police arrive.